At 00.28 hours on 26 April 1940 the unescorted Lily was hit by one torpedo from U-13, but it did not detonate. At 01.17 hours, another torpedo was fired which struck at the bow and broke off the forecastle, causing the ship to sink within 45 seconds. The Lily was reported missing after leaving Kirkwall with a British prize crew (one officer and five ratings) aboard.